Markus Moxham
LongMedium convictionOpen

Fox Corporation Class B

FOXNASDAQ

Long. Live news and sports cash machine.

Thesis
Fox Corporation represents an exceptionally cash-generative, disciplined legacy broadcaster with an unhedged focus on live must-have programming (NFL, college football, Fox News) and high-growth digital avenues (Tubi reaching 100M+ MAUs, Fox One DTC launch). With historically low debt-to-equity, a $1.5B share repurchase commitment, and an undemanding reverse DCF hurdle of just 5.72% annual EPS growth, the stock offers strong downside support. However, high short interest (surging to 4% of float), persistent linear cord-cutting, third-party revenue projections slowing to 1.34%, and escalating sports rights costs create structural risk if digital subscription and AVOD monetization fail to fully offset legacy affiliate fee contraction.
Key assumption
I assume that live sports and opinion news are uniquely insulated from cord-cutting destruction: I assume Fox News and premium live sports contracts (NFL/college football) command irreplaceable viewer engagement, allowing affiliate fee per-subscriber rate increases to counter volume declines in traditional pay-TV. I assume Tubi and Fox One can bridge the digital transition without profitability destruction: I assume AVOD expansion via Tubi and DTC scaling through Fox One (2.3M launch subscribers, Amazon Prime distribution) can successfully capture cord-cutters and cord-nevers without requiring cash-draining, scripted entertainment content budgets.
What would prove me wrong
Accelerated linear pay-TV sub losses breaching the pricing buffer: an intensification of annual cord-cutting beyond 7–8% that outpaces Fox’s contractually negotiated affiliate fee rate hikes, driving consolidated television and cable programming revenue into an unrecoverable decline. Secondly, sports rights bidding inflation outstripping advertising yields: escalating renewal costs for marquee NFL, college football, or MLB packages that compress television segment operating margins without producing commensurate ad-tier pricing power.
Entry$58.26
Price now$57.10marked 10 Sep 2026
Return−2.0%
Benchmark+11.5%S&P 500
vs benchmark−13.5 pp
Held9 monthsopen
Download Markdown
  • Strong analyst forecasts
  • Weak dividends and media sentiment
  • Consistent small-scale sales by insiders of stock
  • Institutional buying by quarter is high, and higher this quarter
  • High short interest, large increase since the prior report, 4x in Q4 2025 ($), typically around 2.5%, now 4% (short percent of float)
  • No congress trading
  • Whales are buying
  • Revenue segments (television and cable network programming) steady over the years with only seasonal peaks and dips. Peaks happen in December.
  • Corporate lobbying is not significant
  • Analyst buy ratings in November, typical for this period
  • Strong, consistent revenue increases
  • Owns: Fox Broadcasting Company, Fox Television Stations, Fox News, Fox Business, Fox Sports, Tubi, Fox One, TMZ
  • Merger with News Corp was abandoned in 2023, Rupert and Lachlan Murdoch supported it but shareholders did not.
  • Fox One is Fox’s streaming service launched in August 2025
  • Owns 18% of FanDuel
  • Tubi has over 100 million monthly active users, mostly in the US. Not available in some other regions
  • AI highlights subscriber declines, negative FCF and decline in FCF growth as negative factors
  • 1.92B from affiliate fees, 1.41B from advertising in most recent quarter
  • Within affiliate fees 1B from cable network programming and 800M from television
  • Within advertising 700M from television and 378M from cable network programming
  • 2.3 million Fox One subscribers at launch. 57% came from the service’s relationship with Amazon, they are on Prime Video as a channel
  • Announced a $1.5 billion share repurchase transaction, signaling confidence
  • Boosted by strong Tubi performance and NFL and College Football Viewership
  • FCF decline was seen as seasonal within the working capital cycle
  • December quarter is typically the strongest due to advertising, NFL/college football, people watching at home during Thanksgiving and Christmas, and affiliate fees increasing with viewership.
  • FOXA is included in indices, FOX is not. FOX has voting power. They have the same financials.
  • Debt is average within industry and historically, debt to equity historically low.
  • Profitability is strong vs competitors (top 90% in most margins). ROE, ROA, ROIC are strong. Historically however, they are average.
  • Low moat score (5) (high within industry), high tariff resilience.
  • Growth historically is amazing currently, in terms of revenue and EBITDA growth rates. Compared to competitors strong (70%)
  • 3 Year FCF growth rate is strong relative to competitors and especially historically.
  • However Future 205Y total revenue growth rate estimate is very weak at 1.34%, provided by 3rd party; no formula.
  • Momentum is average. Returns have been high but RSI suggest overbought potentially
  • Liquidity is good compared to competitors, but not historically
  • Dividend yield is very weak, but buyback and payout ratios are high
  • PE ratio is average compared to competitors and historically. This goes for most of the ratios. Shiller PE is 20.45, average compared with competitors but historically high.
  • PEG ratio is historically low.
  • Revenue growth is strong, slight dip in 2024, EBITDA and net income stable.
  • Debt stable, cash growing but lower than 2020-2022. FCF high, slight growth, historical trend stable.
  • Shares outstanding is slowly decreasing.
  • A lot of operating expenses in this industry so profit is minimal for size.
  • LT assets are significant compared with current
  • Strong EPS without NRI growth. Strong EBITDA growth historically, recently high.
  • FCF growth is strong, particularly this quarter, typically stable though, driven by higher revenues and lower costs
  • Strong book value trends
  • Strong correlations between price and financial metrics like book value and revenue
  • P/S is more concerning than P/E as it is higher than industry average and is not historically low at the moment, compared with P/E which is lower than it was in 2018-2022 (mostly).
  • DCF (EPS) and (FCF) indicates undervalued significantly. This contrasts with most competitors margin of safety. Needs 5.72% EPS growth per year to justify current price according to the model.
  • Gurus are selling after buying heavily in 2024

Updates

The note above is unedited. Anything that changed goes below it, dated.